The NZ sugar tax debate: extended version

Fairfax has posted a debate between myself and Dr Simon Thornley, a public health physician and spokesperson for the sugar tax lobby group FIZZ. We were asked to give our top 5 points for/against a sugar tax (I think Simon’s points might have been merged to avoid repetition). Here’s a taster but as always, do read the whole piece.

There are certain policies worth experimenting with. If they are of low cost and will not leave the population any worse off, there is no harm in trying. A sugar tax is not one of those policies. No matter which way you cut it, a sugar tax is regressive: people on lower incomes will pay disproportionately more of the tax than people on higher incomes.

We’d originally also been given the opportunity to respond to each other’s points, which in my mind would have made for an even richer debate as it ensures we’re not just shouting past each other. Fairfax didn’t end up using the responses, so I’m posting my replies to Fizz here. Given the arguments given in favour of a sugar tax were hardly unique, I think it’s useful to get down on paper why these arguments are not strong enough to justify a sugar tax. For context, it probably is best to read the Stuff piece first.

Fizz point 1: New Zealanders are suffering a health crisis likely to be caused by excess sugar intake

My reply:

We at The New Zealand Initiative are not denying the prevalence of these diseases. Such diseases undoubtedly cause a lot of pain and suffering for the individuals and families involved. We also wouldn’t dispute that eating too much sugar is associated with certain diseases and conditions. However, an acknowledgement of these diseases is not in itself a reason to introduce a sugar tax. There still needs to be evidence that a sugar tax will work to address these health conditions, and that the policy is cost effective.

And on that note, it is important to be specific about the health outcome sugar tax advocates wish to achieve. For example, there are some who argue that obesity is caused by genetic and physiological factors. If obesity and obesity-related diseases are outside of the individual’s control because of genetics, then it is unclear how increasing the price of certain foods will address the disease within that person’s lifetime.

The same point applies for advocates who believe a sugar tax will reduce the instances of children undergoing traumatic dental surgery. But will increasing the price of sugary drinks really be an effective of getting parents to stop giving their children fizzy drink? Would a price increase be more compelling to parents than education on health risks or appealing to parents about their child’s wellbeing?

Evidence that the tax will work to improve health outcomes is necessary but not sufficient. These diseases are concerning. But a sugar tax is a policy that affects the entire population: it is not targeted to those most in need. Are there better-targeted solutions? Is this a policy that a majority of the public are willing to pay for? Again, if the problem is parents putting soda in sippy cups, does tax seem the kind of thing that solves the problem?

Fizz point 2: We are eating and drinking too much sugar

My reply:

If New Zealanders are getting sugar from multiple sources, or there are many sugary products that people could switch to if the price of one of those products goes up, then that is all the more reason for having a very comprehensive tax. The problem is, the more comprehensive the tax, the more difficult it is to decide what products to include (white bread? Yoghurt? Fruit?). A comprehensive tax is also more likely to be regressive as people struggle to switch to untaxed substitutes or must pay more for foods that provide sustenance.

Fizz point 3: Evidence indicates that a sugar tax will improve the health of Kiwis

My reply about comparing sugar with tobacco:

If the tax is high enough, of course it will reduce sugar intake. But to have the same effects as tobacco, a sugar tax would need to be really high and really comprehensive to cover all possible substitutes. If that is the case, it is also more likely to hurt the poor.

Advocating for small, incremental increases will be ineffective if that is all sugar tax advocates intend; and is plain deceptive if a larger increase (or greater comprehensiveness) is the expected end-game.

My reply regarding Mexico’s sugar-sweetened beverages tax:

Mexico has already been discussed. Waikato University’s Professor John Gibson has recently presented preliminary findings that looks specifically at how the Mexican sugar tax will affect weight loss once the quality of the product is taken into account: The ‘Soda Tax’ is Unlikely to Make Mexicans Lighter. Unlike other studies, Gibson’s work considers both the quantity and quality of soda consumed in response to a soda tax (this is particularly helpful given a recent study has been released which repeats the mistakes of previous studies The New Zealand Initiative has critiqued).

My reply to other examples given of jurisdictions implementing a sugar tax:

As with Mexico, the most relevant evidence from overseas examples will be if the sugar tax reduces overall sugar intake and improves health outcomes and if those health benefits outweigh the costs.

My reply to the assertion that a sugar tax would be administratively simple to apply, just as it is for alcohol, fuel and tobacco:

The administration of a sugar tax will be nothing like alcohol, tobacco and fuels as those products have few substitutes. Sugar, as our Fizz representative has pointed out, is everywhere. Even if we were to just consider a tax on sugary drinks, seemingly arbitrary lines will need to be drawn: do fruit drinks count? What about fruit and soda concentrates? Milk-based drink might also count, even if it is hard to calculate the exact sugar content of an orange-mocha frapuccino. The point is “sugar” or “sugary drinks” are not nearly as easy to define as fuel or tobacco.

The fact healthcare costs of treating diseases are often overblown has already been discussed.